Net revenue for VITAS was $292 million in the fourth quarter of 2017,
which is an increase of 2.8%, when compared to the prior-year period.
This revenue increase is comprised of a geographically weighted average
Medicare reimbursement rate increase of approximately 0.8%, a 4.7%
increase in average daily census, offset by Medicare Cap which reduced
revenue 0.9% and acuity mix shift which negatively impacted revenue
1.7%, when compared to the prior-year period.

In the fourth quarter of 2017, VITAS had a 24.3/75.7 RHC Days-of-Care
ratio and generated approximately $1.3 million in SIA revenue. This
compares to a fourth-quarter 2016 RHC Days-of-Care ratio of 24.2/75.8
and SIA revenue of $1.2 million.

VITAS recorded $2.4 million in Medicare Cap billing limitations for two
programs in the quarter, all of which are related to the 2018 Medicare
Cap billing period.

At December 31, 2017, VITAS had 30 Medicare provider numbers, two of
which have an estimated 2018 Medicare Cap billing limitation.

Of VITAS’ 30 unique Medicare provider numbers, 25 provider numbers have
a Medicare Cap cushion of 10% or greater, three provider numbers have a
cap cushion between 5% and 10% and two provider numbers have a Medicare
Cap liability on a trailing twelve-month period.

Average revenue per patient per day in the quarter was $189.33, which is
1.0% below the prior-year period. Routine home care reimbursement and
high acuity care averaged $163.50 and $713.35, respectively. During the
quarter, high acuity days of care were 4.7% of total days of care, 58
basis points less than the prior-year quarter.

The fourth quarter of 2017 gross margin, excluding Medicare Cap, was
24.5%, which is a 41-basis point improvement when compared to the fourth
quarter of 2016.

Selling, general and administrative expense was $22.6 million in the
fourth quarter of 2017, which is a decrease of 3.2% compared to the
prior-year quarter. Adjusted EBITDA, excluding Medicare Cap, totaled
$49.9 million in the quarter, an increase of 7.9%. Adjusted EBITDA
margin, excluding Medicare Cap, was 16.9% in the quarter which is a 66
basis point improvement when compared to the prior-year period.

Roto-Rooter

Roto-Rooter’s plumbing and drain cleaning business generated sales of
$136 million for the fourth quarter of 2017, an increase of $16.8
million, or 14.1%, over the prior-year quarter. Revenue from water
restoration totaled $22.1 million, an increase of $8.4 million or,
61.7%, when compared to the prior-year quarter.

Roto-Rooter’s gross margin in the quarter was 49.3%, a 241 basis point
improvement when compared to the fourth quarter of 2016. Adjusted EBITDA
in the fourth quarter of 2017 totaled $31.1 million, an increase of
24.2%, and the Adjusted EBITDA margin was 22.8% in the quarter, 185
basis points higher than the prior year.

Chemed Consolidated

As of December 31, 2017, Chemed had total cash and cash equivalents of
$11 million and debt of $101 million.

In June 2014, Chemed entered into a five-year Amended and Restated
Credit Agreement that consisted of a $100 million amortizable term loan
and a $350 million revolving credit facility. The interest rate on this
facility has a floating rate that is currently LIBOR plus 112.5 basis
points. At December 31, 2017, the Company had approximately $288 million
of undrawn borrowing capacity under this credit agreement.

The Company did not repurchase any shares of Chemed stock in the
quarter. Chemed repurchased a total of 500,000 shares in 2017 for $95
million which equates to a cost per share of $189.28. As of December 31,
2017, there was $55.5 million of remaining share repurchase
authorization under this plan.

Guidance for 2018

Revenue growth for VITAS in 2018, prior to Medicare Cap, is estimated to
be in the range of 2.5% to 3.5%. Admissions and Average Daily Census in
2018 are estimated to expand approximately 3% to 4% and full-year
Adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 15.4%.
We are currently estimating $5.0 million for Medicare Cap billing
limitations in the 2018 calendar year.

Roto-Rooter is forecasted to achieve full-year 2018 revenue growth of
4.0% to 5.0%. This revenue estimate is based upon increased job pricing
of approximately 2% and continued growth in water restoration services.
Adjusted EBITDA margin for 2018 is estimated at 22.3%.

Based upon the above, full-year 2018 adjusted earnings per diluted
share, excluding non-cash expense for stock options, costs related to
litigation, and other discrete items, is estimated to be in the range of
$10.60 to $10.85. This compares to Chemed’s 2017 reported adjusted
earnings per diluted share of $8.43. This 2018 guidance assumes
an effective corporate tax rate of 25.7%.

Conference Call

Chemed will host a conference call and webcast at 10 a.m., ET, on
Thursday, February 15, 2018, to discuss the Company's quarterly results
and to provide an update on its business. The dial-in number for the
conference call is (844) 743-2500 for U.S. and Canadian participants and
+1 (661) 378-9533 for international participants. The participant
passcode/Conference ID is 3768588. A live webcast of the call can be
accessed on Chemed's website at www.chemed.com
by clicking on Investor Relations Home.

A taped replay of the conference call will be available beginning
approximately 24 hours after the call's conclusion. It can be accessed
by dialing (855) 859-2056 for U.S. and Canadian callers and +1 (404)
537-3406 for international callers and will be available for one week
following the live call. The replay Conference ID is 3768588. An
archived webcast will also be available at www.chemed.com.

Chemed Corporation operates in the healthcare field through its VITAS
Healthcare Corporation subsidiary. VITAS provides daily hospice services
to over 16,500 patients with severe, life-limiting illnesses. This type
of care is focused on making the terminally ill patient's final days as
comfortable and pain-free as possible.

Chemed operates in the residential and commercial plumbing and drain
cleaning industry under the brand name Roto-Rooter. Roto-Rooter provides
plumbing, drain cleaning, and water restoration services through
company-owned branches, independent contractors and franchisees in the
United States and Canada. Roto-Rooter also has licensed master
franchisees in the republics of Indonesia and Singapore, and the
Philippines.

This press release contains information about Chemed’s EBITDA, Adjusted
EBITDA and Adjusted Diluted EPS, which are not measures derived in
accordance with GAAP and which exclude components that are important to
understanding Chemed’s financial performance. In reporting its operating
results, Chemed provides EBITDA, Adjusted EBITDA and Adjusted Diluted
EPS measures to help investors and others evaluate the Company’s
operating results, compare its operating performance with that of
similar companies that have different capital structures and evaluate
its ability to meet its future debt service, capital expenditures and
working capital requirements. Chemed’s management similarly uses EBITDA,
Adjusted EBITDA and Adjusted Diluted EPS to assist it in evaluating the
performance of the Company across fiscal periods and in assessing how
its performance compares to its peer companies. These measures also help
Chemed’s management to estimate the resources required to meet Chemed’s
future financial obligations and expenditures. Chemed’s EBITDA, Adjusted
EBITDA and Adjusted Diluted EPS should not be considered in isolation or
as a substitute for comparable measures calculated and presented in
accordance with GAAP. We calculated Adjusted EBITDA Margin by dividing
Adjusted EBITDA by service revenue and sales. A reconciliation of
Chemed’s net income to its EBITDA, Adjusted EBITDA and Adjusted Diluted
EPS is presented in the tables following the text of this press release.

Forward-Looking Statements

Certain statements contained in this press release and the accompanying
tables are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. The words "believe,"
"expect," "hope," "anticipate," "plan" and similar expressions identify
forward-looking statements, which speak only as of the date the
statement was made. Chemed does not undertake and specifically disclaims
any obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. These statements are based on current expectations and
assumptions and involve various risks and uncertainties, which could
cause Chemed's actual results to differ from those expressed in such
forward-looking statements.

These risks and uncertainties arise from, among other things, possible
changes in regulations governing the hospice care or plumbing and drain
cleaning industries; periodic changes in reimbursement levels and
procedures under Medicare and Medicaid programs; difficulties predicting
patient length of stay and estimating potential Medicare reimbursement
obligations; challenges inherent in Chemed's growth strategy; the
current shortage of qualified nurses, other healthcare professionals and
licensed plumbing and drain cleaning technicians; Chemed’s dependence on
patient referral sources; and other factors detailed under the caption
"Description of Business by Segment" or "Risk Factors" in Chemed’s most
recent report on form 10-Q or

10-K and its other filings with the Securities and Exchange Commission.
You are cautioned not to place undue reliance on such forward-looking
statements and there are no assurances that the matters contained in
such statements will be achieved.

The "Footnotes to Financial Statements" are integral parts of this
financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATING STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

(in thousands)(unaudited)

Chemed

VITAS

Roto-Rooter

Corporate

Consolidated

2017

Service revenues and sales (a)

$

1,148,260

$

518,464

$

-

$

1,666,724

Cost of services provided and goods sold

886,062

264,470

-

1,150,532

Selling, general and administrative expenses (a)

95,215

136,248

45,189

276,652

Depreciation

18,616

16,667

205

35,488

Amortization

14

123

-

137

Other operating expenses (a)

85,614

-

5,266

90,880

Total costs and expenses

1,085,521

417,508

50,660

1,553,689

Income/(loss) from operations

62,739

100,956

(50,660

)

113,035

Interest expense

(188

)

(323

)

(3,761

)

(4,272

)

Intercompany interest income/(expense)

11,656

5,596

(17,252

)

-

Other income/(expense)—net

(126

)

(148

)

8,428

8,154

Income/(loss) before income taxes

74,081

106,081

(63,245

)

116,917

Income taxes (a)

(16,436

)

(32,782

)

30,478

(18,740

)

Net income/(loss)

$

57,645

$

73,299

$

(32,767

)

$

98,177

2016

Service revenues and sales (b)

$

1,123,317

$

453,564

$

-

$

1,576,881

Cost of services provided and goods sold

878,092

237,339

-

1,115,431

Selling, general and administrative expenses (b)

92,550

118,812

32,210

243,572

Depreciation

19,035

14,698

546

34,279

Amortization

55

304

-

359

Other operating expenses (b)

4,491

-

-

4,491

Total costs and expenses

994,223

371,153

32,756

1,398,132

Income/(loss) from operations

129,094

82,411

(32,756

)

178,749

Interest expense

(211

)

(332

)

(3,172

)

(3,715

)

Intercompany interest income/(expense)

7,969

3,595

(11,564

)

-

Other income/(expense)—net

19

(62

)

2,063

2,020

Income/(loss) before income taxes

136,871

85,612

(45,429

)

177,054

Income taxes (b)

(51,910

)

(32,719

)

16,318

(68,311

)

Net income/(loss)

$

84,961

$

52,893

$

(29,111

)

$

108,743

The "Footnotes to Financial Statements" are integral parts of this
financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATING SUMMARIES OF EBITDA

FOR THE THREE MONTHS ENDED DECEMBER 31, 2017 AND 2016

(in thousands)(unaudited)

Chemed

VITAS

Roto-Rooter

Corporate

Consolidated

2017

Net income/(loss)

$

42,848

$

25,583

$

(13,879

)

$

54,552

Add/(deduct):

Interest expense

27

65

1,016

1,108

Income taxes

8,406

3,228

(8,047

)

3,587

Depreciation

4,568

4,344

31

8,943

Amortization

-

26

-

26

EBITDA

55,849

33,246

(20,879

)

68,216

Add/(deduct):

Intercompany interest expense/(income)

(3,177

)

(1,562

)

4,739

-

Interest income

(121

)

(10

)

-

(131

)

Litigation settlement

(5,524

)

-

-

(5,524

)

Loss on sale of transportation equipment

-

-

5,266

5,266

Medicare cap sequestration adjustment

342

-

-

342

Expenses related to OIG investigation

16

-

-

16

Amortization of stock awards

71

66

160

297

Advertising cost adjustment (c)

-

(664

)

-

(664

)

Stock option expense

-

-

2,747

2,747

Long-term incentive compensation

-

-

1,973

1,973

Adjusted EBITDA

$

47,456

$

31,076

$

(5,994

)

$

72,538

2016

Net income/(loss)

$

26,421

$

13,679

$

(7,911

)

$

32,189

Add/(deduct):

Interest expense

35

68

781

884

Income taxes

16,023

8,272

(4,159

)

20,136

Depreciation

4,690

3,838

132

8,660

Amortization

14

71

-

85

EBITDA

47,183

25,928

(11,157

)

61,954

Add/(deduct):

Intercompany interest expense/(income)

(2,130

)

(981

)

3,111

-

Interest income

(69

)

(13

)

-

(82

)

Expenses related to OIG investigation

1,155

-

-

1,155

Amortization of stock awards

86

76

279

441

Advertising cost adjustment (c)

-

20

-

20

Litigation settlement costs

-

1

-

1

Stock option expense

-

-

2,071

2,071

Long-term incentive compensation

-

-

1,029

1,029

Adjusted EBITDA

$

46,225

$

25,031

$

(4,667

)

$

66,589

The "Footnotes to Financial Statements" are integral parts of this
financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATING SUMMARIES OF EBITDA

FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

(in thousands)(unaudited)

Chemed

VITAS

Roto-Rooter

Corporate

Consolidated

2017

Net income/(loss)

$

57,645

$

73,299

$

(32,767

)

$

98,177

Add/(deduct):

Interest expense

188

323

3,761

4,272

Income taxes

16,436

32,782

(30,478

)

18,740

Depreciation

18,616

16,667

205

35,488

Amortization

14

123

-

137

EBITDA

92,899

123,194

(59,279

)

156,814

Add/(deduct):

Intercompany interest expense/(income)

(11,656

)

(5,596

)

17,252

-

Interest income

(388

)

(39

)

-

(427

)

Litigation settlement

84,476

213

-

84,689

Medicare cap sequestration adjustment

447

-

-

447

Loss on sale of transportation equipment

-

-

5,266

5,266

Program closure expenses

1,138

-

-

1,138

Expenses related to OIG investigation

5,194

-

-

5,194

Amortization of stock awards

291

269

670

1,230

Advertising cost adjustment (c)

-

(1,371

)

-

(1,371

)

Stock option expense

-

-

10,485

10,485

Long-term incentive compensation

-

-

4,994

4,994

Adjusted EBITDA

$

172,401

$

116,670

$

(20,612

)

$

268,459

2016

Net income/(loss)

$

84,961

$

52,893

$

(29,111

)

$

108,743

Add/(deduct):

Interest expense

211

332

3,172

3,715

Income taxes

51,910

32,719

(16,318

)

68,311

Depreciation

19,035

14,698

546

34,279

Amortization

55

304

-

359

EBITDA

156,172

100,946

(41,711

)

215,407

Add/(deduct):

Intercompany interest expense/(income)

(7,969

)

(3,595

)

11,564

-

Interest income

(325

)

(58

)

-

(383

)

Early retirement expenses

4,491

-

-

4,491

Expenses related to OIG investigation

5,260

-

-

5,260

Amortization of stock awards

387

307

1,161

1,855

Medicare cap sequestration adjustment

228

-

-

228

Advertising cost adjustment (c)

-

(1,333

)

-

(1,333

)

Net expenses related to litigation settlements

1,149

45

-

1,194

Long-term incentive compensation

-

-

1,930

1,930

Stock option expense

-

-

8,330

8,330

Adjusted EBITDA

$

159,393

$

96,312

$

(18,726

)

$

236,979

The "Footnotes to Financial Statements" are integral parts of this
financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

RECONCILIATION OF ADJUSTED NET INCOME

(in thousands, except per share data)(unaudited)

Three Months Ended December 31,

For the Years Ended December 31,

2017

2016

2017

2016

Net income as reported

$

54,552

$

32,189

$

98,177

$

108,743

Add/(deduct) after-tax cost of:

Excess tax benefits on stock compensation

(10,811

)

-

(18,932

)

-

Impact of tax reform

(8,302

)

-

(8,302

)

-

Litigation settlement

(3,425

)

-

52,504

-

Loss on sale of transportation equipment

3,314

-

3,314

-

Stock option expense

2,000

1,308

6,892

5,266

Long-term incentive compensation

1,332

651

3,243

1,221

Expenses of OIG investigation

9

713

3,207

3,248

Program closure expenses

-

-

675

-

Expenses related to litigation settlements

-

1

-

28

Medicare cap sequestration adjustments

211

-

276

141

Early retirement expenses

-

-

-

2,840

Adjusted net income

$

38,880

$

34,862

$

141,054

$

121,487

Diluted Earnings Per Share As Reported

Net income

$

3.25

$

1.94

$

5.86

$

6.48

Average number of shares outstanding

16,776

16,598

16,742

16,789

Adjusted Diluted Earnings Per Share

Adjusted net income

$

2.32

$

2.10

$

8.43

$

7.24

Average number of shares outstanding

16,776

16,598

16,742

16,789

The "Footnotes to Financial Statements" are integral parts of this
financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

OPERATING STATISTICS FOR VITAS SEGMENT

(unaudited)

Three Months Ended December 31,

For the Years Ended December 31,

OPERATING STATISTICS

2017

2016

2017

2016

Net revenue ($000) (d)

Homecare

$

242,554

$

228,463

$

935,913

$

887,940

Inpatient

22,033

23,724

90,472

97,580

Continuous care

30,131

31,999

124,557

138,025

Total before Medicare cap allowance

$

294,718

$

284,186

$

1,150,942

$

1,123,545

Medicare cap allowance

(2,435

)

-

(2,682

)

(228

)

Total

$

292,283

$

284,186

$

1,148,260

$

1,123,317

Net revenue as a percent of total before Medicare cap allowance

Homecare

82.3

%

80.4

%

81.2

%

78.9

%

Inpatient

7.5

8.3

7.9

8.7

Continuous care

10.2

11.3

10.9

12.4

Total before Medicare cap allowance

100.0

100.0

100.0

100.0

Medicare cap allowance

(0.8

)

-

(0.2

)

-

Total

99.2

%

100.0

%

99.8

%

100.0

%

Average daily census ("ADC") (days)

Homecare

12,861

12,241

12,549

12,040

Nursing home

3,265

3,065

3,177

3,037

Routine homecare

16,126

15,306

15,726

15,077

Inpatient

342

383

354

400

Continuous care

452

471

470

515

Total

16,920

16,160

16,550

15,992

Total Admissions

16,575

15,889

66,449

65,094

Total Discharges

16,553

16,282

65,637

64,689

Average length of stay (days)

91.4

91.4

88.8

86.7

Median length of stay (days)

16.0

16.0

16.0

16.0

ADC by major diagnosis

Cerebro

36.1

%

33.4

%

35.5

%

32.7

%

Neurological

18.5

20.3

19.2

21.1

Cardio

16.4

16.9

16.5

17.1

Cancer

14.1

15.4

14.6

15.3

Respiratory

8.0

7.8

7.9

7.8

Other

6.9

6.2

6.3

6.0

Total

100.0

%

100.0

%

100.0

%

100.0

%

Admissions by major diagnosis

Cerebro

22.3

%

21.6

%

22.0

%

21.0

%

Neurological

10.7

11.3

10.6

11.0

Cancer

30.0

32.2

30.6

31.8

Cardio

14.9

16.0

15.0

15.4

Respiratory

10.7

10.8

10.8

10.2

Other

11.4

8.1

11.0

10.6

Total

100.0

%

100.0

%

100.0

%

100.0

%

Direct patient care margins (e)

Routine homecare

53.9

%

53.1

%

52.6

%

52.1

%

Inpatient

8.5

1.2

5.4

2.3

Continuous care

16.8

15.8

16.9

14.2

Homecare margin drivers (dollars per patient day)

Labor costs

$

55.65

$

56.11

$

56.80

$

56.41

Combined drug, home medical equipment and

medical supplies cost

14.30

14.99

14.65

15.66

Inpatient margin drivers (dollars per patient day)

Labor costs

$

355.96

$

363.06

$

366.41

$

350.56

Continuous care margin drivers (dollars per patient day)

Labor costs

$

583.45

$

602.30

$

584.49

$

607.52

Bad debt expense as a percent of revenues

1.1

%

1.2

%

1.1

%

1.2

%

Accounts receivable --

Days of revenue outstanding- excluding unapplied Medicare payments

33.7

36.5

n.a.

n.a.

Days of revenue outstanding- including unapplied Medicare payments

25.0

32.6

n.a.

n.a.

The "Footnotes to Financial Statements" are integral parts of this
financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

FOOTNOTES TO FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2017 AND 2016

(unaudited)

(a)

Included in the results of operations for 2017 are the following
significant credits/(charges) which may not be indicative of ongoing
operations

(in thousands):

For the Three Months Ended December 31, 2017

VITAS

Roto-Rooter

Corporate

Consolidated

Service revenues and sales:

Medicare cap sequestration adjustment

$

(342

)

$

-

$

-

$

(342

)

Selling, general and administrative expenses:

Expenses related to OIG investigation

(16

)

-

-

(16

)

Stock option expense

-

-

(2,747

)

(2,747

)

Long-term incentive compensation

-

-

(1,973

)

(1,973

)

Other operating expenses:

Litigation settlements

5,524

-

-

5,524

Loss on sale of transportation equipment

-

-

(5,266

)

(5,266

)

Pretax impact on earnings

5,166

-

(9,986

)

(4,820

)

Impact of tax reform

11,057

7,761

(10,516

)

8,302

Excess tax benefits on stock compensation

-

-

10,811

10,811

Income tax benefit on the above

(1,961

)

-

3,340

1,379

After-tax impact on earnings

$

14,262

$

7,761

$

(6,351

)

$

15,672

For the Year Ended December 31, 2017

VITAS

Roto-Rooter

Corporate

Consolidated

Service revenues and sales:

Medicare cap sequestration adjustment

$

(447

)

$

-

$

-

$

(447

)

Selling, general and administrative expenses:

Expenses related to OIG investigation

(5,194

)

-

-

(5,194

)

Stock option expense

-

-

(10,485

)

(10,485

)

Long-term incentive compensation

-

-

(4,994

)

(4,994

)

Other operating expenses:

Litigation settlements

(84,476

)

(213

)

-

(84,689

)

Loss on sale of transportation equipment

-

-

(5,266

)

(5,266

)

Program closure expenses

(1,138

)

-

-

(1,138

)

Pretax impact on earnings

(91,255

)

(213

)

(20,745

)

(112,213

)

Impact of tax reform

11,057

7,761

(10,516

)

8,302

Excess tax benefits on stock compensation

-

-

18,932

18,932

Income tax benefit on the above

34,722

84

7,296

42,102

After-tax impact on earnings

$

(45,476

)

$

7,632

$

(5,033

)

$

(42,877

)

(b)

Included in the results of operations for 2016 are the following
significant credits/(charges) which may not be indicative of ongoing
operations

(in thousands):

For the Three Months Ended December 31, 2016

VITAS

Roto-Rooter

Corporate

Consolidated

Selling, general and administrative expenses:

Expenses related to OIG investigation

$

(1,155

)

$

-

$

-

$

(1,155

)

Expenses related to litigation settlements

-

(1

)

-

(1

)

Stock option expense

-

-

(2,071

)

(2,071

)

Long-term incentive compensation

-

-

(1,029

)

(1,029

)

Pretax impact on earnings

(1,155

)

(1

)

(3,100

)

(4,256

)

Income tax benefit on the above

442

-

1,141

1,583

After-tax impact on earnings

$

(713

)

$

(1

)

$

(1,959

)

$

(2,673

)

For the Year Ended December 31, 2016

VITAS

Roto-Rooter

Corporate

Consolidated

Service revenues and sales:

Medicare cap sequestration adjustment

$

(228

)

$

-

$

-

$

(228

)

Selling, general and administrative expenses:

Expenses related to OIG investigation

(5,260

)

-

-

(5,260

)

Expenses related to litigation settlements

-

(45

)

-

(45

)

Stock option expense

-

-

(8,330

)

(8,330

)

Long-term incentive compensation

-

-

(1,930

)

(1,930

)

Other operating expenses:

Early retirement expenses

(4,491

)

-

-

(4,491

)

Pretax impact on earnings

(9,979

)

(45

)

(10,260

)

(20,284

)

Income tax benefit on the above

3,750

17

3,773

7,540

After-tax impact on earnings

$

(6,229

)

$

(28

)

$

(6,487

)

$

(12,744

)

(c)

Under Generally Accepted Accounting Principles ("GAAP"), the
Roto-Rooter segment expenses all advertising, including the cost
of telephone directories, immediately upon the initial release of
the advertising. Telephone directories are generally in
circulation 12 months. If a directory is in circulation for a time
period greater or less than 12 months, the publisher adjusts the
directory billing for the change in billing period. The timing of
when a telephone directory is published can and does fluctuate
significantly on a quarterly basis. This "direct expensing"
results in significant fluctuations in quarterly advertising
expense. In the fourth quarters of 2017 and 2016, GAAP advertising
expense for Roto-Rooter totaled $8,145,000 and $7,323,000,
respectively. If the expense of the telephone directories were
spread over the periods they are in circulation, advertising
expense for the fourth quarters of 2017 and 2016 would total
$8,809,000 and $7,303,000, respectively.

Similarly, for the years ended December 31, 2017 and 2016, GAAP
advertising expense for Roto-Rooter totaled $31,042,000 and
$26,717,000, respectively. If the expense of the telephone
directories were spread over the periods they are in circulation,
advertising expense for the years ended December 31, 2017 and 2016
would total $32,413,000 and $28,050,000, respectively.

(d)

VITAS has 11 large (greater than 450 ADC), 16 medium (greater than
200 but less than 450 ADC) and 17 small (less than 200 ADC)
hospice programs. Of VITAS' 30 unique Medicare provider numbers,
23 provider numbers have a Medicare cap cushion of 10%, five
provider numbers have Medicare cap cushion between 3% and 5% and
two provider numbers have a Medicare cap liability for the current
cap year.